GM Announces Pension Changes

By: Associated Press
By: Associated Press

General Motors plans to transform its pension benefits for salaried workers from a defined benefit plan into one that relies more heavily on employee contributions.

Starting next January first, GM will freeze the accrued pension benefits for salaried employees.

Those hired after January 2001 will be placed in a defined contribution plan, and G-M will contribute a certain amount to their 401K. Salaried employees hired before then will remain in a defined benefit plan, but will get reduced benefits under a new formula.

The changes are expected to reduce the auto maker's year-end 2006 pension liability by approximately one-point-six billion dollars.

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